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Improved methods for carbonaccounting for bioenergyDescriptions and evaluations

Naomi Pena

David Neil Bird

Giuliana Zanchi

O C C A S I O N A l P A P e R


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OccasiOnal paper 64

Improved methods or carbon

accounting or bioenergy

Descriptions and evaluations

Naomi Pena, David Neil Bird and Giuliana Zanchi

Joanneum Research


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Occasional Paper 64 2011 Center or International Forestry ResearchAll rights reserved

ISBN 978-602-8693-51-6

Pena, N., Bird, D.N., Zanchi, G. 2011 Improved methods or carbon accounting orbioenergy: Descriptions and evaluations. Occasional paper 64. CIFOR, Bogor, Indonesia

Cover photo: Hannes Schwaiger

This paper was produced with the nancial assistance o the European Union, undera project titled, Bioenergy, sustainability and trade-os: Can we avoid deorestationwhile promoting bioenergy? The objective o the project is to contribute to sustainablebioenergy development that benets local people in developing countries, minimisesnegative impacts on local environments and rural livelihoods, and contributes toglobal climate change mitigation. The project will achieve these aims by producing andcommunicating policy-relevant analyses that can inorm government, corporate and civilsociety decision-making related to bioenergy development and its eects on orests andlivelihoods. The project is managed by CIFOR and implemented in collaboration with theCouncil on Scientic and Industrial Research (South Arica), Joanneum Research (Austria),the Universidad Nacional Autnoma de Mxico and the Stockholm Environment Institute.

CIFORJl. CIFOR, Situ GedeBogor Barat 16115Indonesia

T +62 (251) 8622-622F +62 (251) 8622-100

E [email protected]

www.cior.cgiar.org

The views expressed herein are those o the authors only. They can in no way be taken toreect the ofcial opinion o the European Union, or the institutions and organisations orwhich the authors work.


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Table o contents

List of abbreviations v

Executive summary vi

1 Introduction 1

1.1 Structure and scope o the report 2

2 The basic accounting approaches 3

2.1 Combustion actor = 0 approaches 4


2.3 Value-chain approaches 6

3 Alternative accounting systems 9



3.3 Value-chain approaches 12

3.4 Summary and numerical examples 15

4 Evaluation of accounting systems 19

4.1 Comprehensiveness over space and time 20

4.2 Simplicity 23

4.3 Scale independence 25

4.4 Summary 26

5 Impacts of accounting systems on stakeholder goals 27

5.1 Stakeholder goals: Biomass or energy 27

5.2 Evaluations against goals: Looking at incentives 28

5.3 Summary 32

6 Summary and conclusions 35

7 References 39


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List o fgures, tables and boxes

Figures

1 Physical greenhouse gas emissions and ows o carbon in a bioenergy system. 4

2 Location o where the physical ows are theoretically accounted or in a 0-combustion actor approach 5

3 Location o where the physical ows are theoretically accounted or in a 1-combustion actor approach 5

4 Location o where the physical ows are theoretically accounted or in a value-chain approach 7

5 Location o where the physical ows are theoretically accounted or in a tailpipe approach 11

6 Location o where the physical ows are theoretically accounted or in a point o uptake and release

(POUR) approach (combustion actor = 1) 12

7 Location o where the physical ows are theoretically accounted or in a value-chain approach 13

Tables

1 Summary o accounting systems 15

2 Numerical example demonstrating dierences between the accounting systems 15

3 Subjective evaluation o accounting approaches according to criteria 26

4 Subjective evaluation o accounting approaches support o goals 33

5 Combined subjective evaluation o accounting approaches 34

Boxes

1 Grounds or attributing zero CO2 emissions to bioenergy in the energy sector as provided in the IPCC guidelines 6

2 Timing in value-chain systems: Possible options 23

3 Value-chain accounting in international agreements 25


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List o abbreviations

ARD Aorestation, reorestation and deorestation

CBA Consumer-based accounting

CO2 Carbon dioxide

EPA Environmental Protection Agency (United States)EU Renewable Energy Directive Directive 2009/28/EC o the European Parliament and o the Council o

23 April 2009 on the promotion o the use o energy rom renewable

sources and amending and subsequently repealing Directives

2001/77/EC and 2003/30/EC

EU-ETS European Union Emissions Trading Scheme

GDP Gross domestic product

GHG Greenhouse gas

iLUC Indirect land use change

IPCC Intergovernmental Panel on Climate Change

LCA Lie-cycle assessment

LUC Land use change

POUR Point o uptake and release

REDD+ Reducing emissions rom deorestation and orest degradation

and enhancing carbon stocks

UNFCCC United Nations Framework Convention on Climate Change

US RFS2 US Renewable Fuels Standard

WTO World Trade Organization


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Executive summary

his report reviews and evaluates bioenergy

accounting approaches in the climate

context. Consideration o alternative

accounting approaches or emissions generatedby the use o biomass or energy is very timely.

Both the European Union and the United States

are engaged in consultation processes to develop

regulatory approaches to these emissions. Te EU

consultations are, to some extent, taking place

because the accounting system under the Kyoto

Protocol results in use o bioenergy beyond the

level justied by the climate mitigation it achieves.

Te US consultations are in response to the US

Environmental Protection Agencys (EPA) recent

obligation to regulate carbon dioxide (CO2)emissions rom all sources. Tis process has openly

raised the question o whether CO2 emissions rom

use o bioenergy should be treated in the same

manner as CO2 emissions rom use o ossil uels.

Under the United Nations Framework Convention

on Climate Change (UNFCCC) and the Kyoto

Protocol, CO2 emissions rom use o bioenergy

are counted in the land use sector as carbon stock

losses, rather than as emissions in the energy sector,

where emissions rom ossil uels are counted. Tis

accounting method, which is also applied under the

EU Emissions rading Scheme (EU-ES), omits

many emissions that result rom use o bioenergy

in nations with greenhouse gas (GHG) limitation

obligations. Consequently, alternative accounting

systems are being proposed that would more ully

include emissions rom bioenergy use in countries

with GHG-limitation obligations in the real-world

situation that developing countries do not currently,

and probably will not in the near uture, haveGHG limitations.

Te report describes and evaluates various

bioenergy accounting systems that could be used

in nations with GHG-limitation obligations. In

this report, the systems are classied into 3 basicapproaches:

1. CO2 emissions are multiplied by 0 at the point

o combustion (the current system in which no

CO2 emissions are attributed to bioenergy in the

energy sector under the Kyoto Protocol and

EU-ES);

2. CO2 emissions are multiplied by 1 at the point

o combustion (the basic alternative in which the

CO2 emitted when biomass is combusted would

be counted in the same way CO2 released upon

combustion o ossil uels is accounted or under

the Kyoto Protocol); and

3. CO2 emissions along the biomass-energy

value chain are the responsibility o end users

regardless o where these emissions occur.

Value-chain approaches can use calculated

amounts o emissions to determine whether

bioenergy meets a regulatory requirement

or to derive a combustion actor potentially

other than 0 or 1 or application to

combustion emissions.

Tis report briey describes accounting system

options and then evaluates them in 2 ways.

First, options are evaluated against 3 criteria:

(1) comprehensiveness over space and time, i.e.,

the extent to which the system accurately counts

all emissions; (2) simplicity, including ease o

implementation; and (3) scale independence, or

the degree to which the system can be used at the

project, entity, national or global level. Second,

accounting systems are evaluated with regard to


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imovd mthod fo bo outg fo bogy | v

the degree to which they support 3 key stakeholder

goals: (1) stimulation o rural economies and ood

security; (2) GHG emission reductions; and (3)

preservation o orests. From the perspective o

GHGs, comprehensiveness over space and timeis the most important criterion, but or many

stakeholders, support or rural economies or

preservation o orests are the most important goals.

A key conclusion is that, generally, 1 multiplier

approaches incorporate more emissions than 0

multiplier approaches. Value-chain systems are the

most comprehensive with regard to emissions that

attend use o bioenergy. POUR (point o uptake

and release), one o the 1-mulitplier approaches

reviewed, is the most comprehensive system as aras orest-related emissions are concerned because

it counts all orest atmospheric removals as well

as emissions rom all uses o biomass, not only

those rom use o biomass or energy. Furthermore,

POUR has the potential to be the most accurate

system in reporting emissions where and when they

occur and when the goals o stimulation o rural

economies and ood security are prioritised, POUR

continues to rank at the top o the available options.

However, POUR does not rate well in terms oorest preservation.

I careully constructed, supplemental policies

can render a 0 multiplier approach efective in

spatial coverage. For example, a 0 multiplier

approach can support all 3 goals i sources o

biomass or bioenergy are restricted to nations

with economy-wide GHG limitations. However,

in our opinion, this approach is o limited value

because most countries would likely remain outside

o the accounting system. Finally, a well-designedvalue-chain approach could strongly support GHG

reductions and preservation o orests, but would

be inormation intensive and depend on associated

bioenergy mandates or the structure o a cap-and-

trade system to stimulate the rural economy.


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Accounting systems strongly inuence decisions,

and pressure is increasing to alter the accounting

system used to calculate emissions due to bioenergy

under the Kyoto Protocol and the EU Emissions

rading Scheme (EU-ES) (Peters et al. 2009,

Searchinger et al. 2009). Te current accounting

system does not capture the ull extent o greenhouse

gas (GHG) emissions caused by bioenergy, and

hence encourages nations and energy producers to

use more bioenergy than is justied by the amount

o GHG emission reductions it achieves.

Under the Kyoto Protocol accounting system,

carbon dioxide (CO2) emissions released rom use

o biomass are counted not in the energy sector,

but rather as changes in levels o carbon stocks in

the land use sector. However, carbon stock level

changes are not accounted or in nations that do not

have GHG obligations under the Kyoto Protocol.

Tereore, in the case o biomass sourced rom these

nations, neither the carbon stock changes nor the

emissions at the point o combustion are accountedoreven i the biomass is used in nations that

do have obligations under the Kyoto Protocol.

Tis situation has 2 consequences. First, nations

with GHG limitations have an incentive to source

biomass rom nations that do not. Second, since the

Kyoto Protocol accounting system relieves energy

producers o all responsibility or CO2 emissions

rom bioenergy, the system provides a powerul

incentive or them to use bioenergy even where its

use may lead to increases in CO2 emissions.

o date, nations with GHG obligationswith the

exception o New Zealandhave not imposed

emission limitations, or requirements to hold

permits to emit, on entities within the land use

sector. Furthermore, the land use sector is not

included in the EU-ES. Tereore, carbon stock

losses in the land use sector caused by an increase

in bioenergy use are irrelevant both to individual

actors in the land use sector in the EU and to energy

producers that have obligations under the EU-ES.

Tese energy producers have a strong incentive

to use bioenergy because the EU-ES does not

require them to surrender permits to cover theseemissions. However, carbon stock reductions due

to use o bioenergy lower a nations, and the EUs

net removals in the land use section, which makes

it more dicult or the nation and the EU to meet

its GHG emission target. In this case, a likely EU

response would be to provide ewer allowances

under the EU-ES. As long as bioenergy emissions

continue not to be counted, this action would be

likely to stimulate greater use o bioenergy by energy

producers with GHG emission limitations, thus

creating a vicious circle and exacerbating ratherthan alleviating the problem.

Tis situation can be addressed by bringing more

land use sector emissions into the accounting system

and/or increasing the responsibility o energy sector

entities or bioenergy emissions. Approaches that

do one or both o these could potentially lead to

better alignment o bioenergy use with its GHG

consequences. Tis study ocuses on evaluating

accounting options that seem to ofer this benet,

with the current EU and US consultation processes

on how to address bioenergy emissions within

regulatory rameworks lending urgency to the task.

Introduction

1


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2 | Naomi Pena, David Neil Bird and Giuliana Zanchi

1.1 Structure and scopeof the report

Tis report ocuses on alternative accounting

systems or bioenergy that nations or regionscould use in calculating their GHG emissions. We

rst discuss the three main types o approaches

to emissions rom bioenergy that can be used in

accounting systems (Section 2). In Section 3, we

describe alternative accounting systems under

each o the main types, noting which o these are

in use, which represent modications o an in-use

approach, and which have been suggested but are

not yet in use. In Section 4, we propose general

criteria (comprehensiveness, simplicity, scale

independence) or evaluating bioenergy accounting

systems, which we then apply to evaluate the

systems. In Section 5, we consider key goalsGHG

mitigation, energy and ood security, and orest

preservationthat diverse stakeholder groups may

pursue in connection with use o bioenergy, and

discuss the t between the systems and these goals.

In Section 6, we set out our conclusions.

Recent negotiations under the United Nations

Framework Convention on Climate Change(UNFCCC) have led to commitments to provide

unds to developing countries to reduce emissions

rom deorestation and degradation, and or orest

conservation (REDD+). Slowing deorestation and

orest degradation may reduce the availability o

biomass or energy and/or increase its price, thus

reducing emissions rom this source. However,REDD+ credits may enter accounting systems as

ofsets,1thus lowering entities costs o meeting

their GHG obligations. Given the substantial

uncertainties about how the REDD+ system will

interact with demand or bioenergy, we do not

attempt to envisage interactions between REDD+

and the proposed accounting systems. Furthermore,

as the baseline and crediting systems envisaged

under REDD+ do not afect how emissions rom

bioenergy are accounted or, as the term bioenergy

accounting is used here, we do not discuss thebaseline and crediting concept in this report.

We also recognise that intensity-based targets (e.g.

tonnes o GHGs per unit energy, gross domestic

product (GDP) or output rather than an absolute

number o tonnes) may be incorporated into

both developing and developed country climate

initiatives, possibly in conjunction with sectoral or

bilateral agreements. Although such intensity-based

accounting approaches do have attractive eatures,particularly or the land use sector and bioenergy,

analysing them is beyond the scope o this report.

1 Ofsets reer to GHG emission credits allocated toentities without GHG obligations under a system in whichentities with GHG obligations can use such credits to helpthem meet their targets.


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Te basic reason or using bioenergy to help

mitigate climate change is thatin contrast to ossil

uel carbon stocksbiomass carbon stocks can

be replenished relatively quickly by growing new

biomass. However, the emissions rom combusting

biomass and the replenishment o carbon stocks

generally take place in dierent locations, oen

in countries ar rom each other, and in dierent

time periods. Tis creates challenges or accounting

systems i overall emissions are to be accounted

or accurately but not all countries account ortheir emissions.

Each approach to accounting or emissions rom

use o bioenergy that has been implemented or

proposed addresses some or all o these issues,

although they do so dierently. Te ollowing 3

philosophies orm the basis o all the approaches to

accounting or emissions rom use o bioenergy that

are discussed in Section 3:

A. Combustion factor = 0: CO2

emissions

produced when biomass is burnt or energy

are multiplied by 0 at the point o combustion;

the emissions are accounted or in the land use

sector as carbon stock losses.

B. Combustion factor = 1: CO2 emissions

produced when biomass is burnt or energy

are multiplied by 1 at the point o combustion;

emissions are accounted or in the energy sector;

uptake o CO2 rom the atmosphere by plants

and soils may, or may not, be accounted or.

C. Value-chain approaches: End users areresponsible or all, or a specied subset o,

emissions that occur along the bioenergy value

The basic accountingapproaches2

chain regardless o where these emissions occur.

Te calculated emissions can be used either

to determine whether bioenergy is eligible to

meet a regulatory requirement, or to derive a

combustion actor potentially other than 0 or 1

to be applied to combustion emissions.

Troughout this report, accounting systems that

use either A or B are assumed to account or

emissions attendant on use o bioenergy other than

carbon stock gains and losses, e.g. emissions dueto transportation o the biomass, in the relevant

sector. In contrast, an accounting system that uses C

brings all emissions attendant on use o bioenergy

into bioenergy accounting. It thereore needs to

ensure that any emissions included in the bioenergy

accounting system are not also counted elsewhere.

o demonstrate dierences between the approaches,

we use the simple schematic diagram shown in

Figure 1. Tis diagram shows the ows o GHGs

to and rom the atmosphere and the trading obiomass (as carbon, C) between the biomass

producer and its consumer. Te biomass producer

has three emission streams: CO2 absorbed by

plants; CO2 oxidised by plants (both o which

are shown as Bio-CO2); and ossil-CO2 and non-

CO2 emissions that attend biomass production,

conversion and its transportation to a consumer.

Te biomass consumer has 2 streams: CO2 rom the

combustion o biomass (bioenergy CO2) and ossil-

CO2

and non-CO2

emissions rom combustion

and distribution o uels to end users.


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As the starting point or the discussion, the diagram

shows where thephysicalemissions, carbon uptake

and carbon transer occur in reality. During thediscussion and description o ways to account or

these emissions, we introduce variations o this

diagram to illustrate dierences regarding which

emission streams are attributed to the biomass

producer or the biomass consumer. Subsequent

diagrams show the location in which accounting

o emissions occurs rather than the location o the

actualphysicalows.

2.1 Combustion factor = 0approaches

Tis approach multiplies bioenergy emissions by

0 at the point o combustion (combustion actor

= 0). Emissions due to combustion o biomass

are counted as carbon stock losses in the land use

sector (see Figure 2). Under 0-combustion actor

approaches, other emissions connected to use o

bioenergy, such as those rom biomass conversion

and transportation (blue arrows), are accountedor in other parts o the accounting system, or

example under combustion o ossil uels. Te

Intergovernmental Panel on Climate Change

(IPCC) methodology or calculating emissions

rom bioenergy, which was adopted under the

Kyoto Protocol, is an example o a 0-combustionactor approach.

Te concept underlying this approach is that

as long as sufcient biomass grows to replace

the combusted biomass (Bio-CO2 Bioenergy

CO2), there are no atmospheric consequences

the atmospheric CO2 burden will not rise. Te

atmospheric burden increases only i harvesting

exceeds growth.2 In this case a reduction in

carbon stocks occurs, and the system assumes this

reduction will be registered in the land use sector

(see Box 1). As long as carbon stock reductions

do not occur, or do not appear in the accounting,

no emissions are attributed to use o biomass

or energy.

In terms o our schematic diagram, under the

0-combustion actor approach, the bioenergy vector

shis rom the consumer to the biomass producer

(Figure 2).

2 Although this is not possible over the long term, it canoccur within time rames o concern to many climate-mitigation stakeholders.

Atmosphere

Bioenergy

CO

Consumer

Fossil-CO

Non-CO

Producer

Growth

Oxidation

Bio-COFossil-CO

Non-CO

Transferred C

Figure 1.Physical greenhouse gas emissions and fows o carbon in a bioenergy system


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Improved methods for carbon accounting for bioenergy | 5

Atmosphere

Bioenergy

CO

Consumer

Fossil-CO

Non-CO

Producer

Growth

Oxidation

Bio-CO Fossil-CO

Non-CO

Figure 2. Location o where the physical fows are theoretically accounted or in a 0-combustion

actor approach

Atmosphere

Bioenergy

CO

Consumer

Fossil-CO

Non-CO

Producer

Growth

Oxidation

Bio-CO Fossil-CO

Non-CO

Figure 3. Location o where the physical fows are theoretically accounted or in a 1-combustion

actor approach


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2.2 Combustion factor = 1approaches

Te basic alternativeto using a 0-combustion

actor is to treat CO2 emissions rom biomass

in the same way as emissions rom ossil uels

(Figure 3). Emissions at the point o combustion

are multiplied by 1, that is, they are given their

ull value.3 As can be seen, Figure 3 is identical to

Figure 1. Tus the 1-combustion approach accounts

or emissions as they occur in reality. As in the case

o the 0-combustion actor approach, emissions

other than carbon stock losses are accounted or

elsewhere in the accounting system, or example, inthe sector in which they occur. Although proposed,

1-combution systems are not yet in use.

2.3 Value-chain approaches

Te EU Renewable Energy Directive and the US

Renewable Fuel Standard are examples o value-

chain approaches applied to biouels. However,

3 CO2 emissions are used as the basis or assigning valuesto other gases. Emissions o other GHGs are assigned valuesdetermined by their global warming impacts relative to theimpact o a tonne o CO2.

value-chain approaches have not yet been applied

to biomass used or heat and power. Tese,

approaches consider both negative and positive

GHG consequences along the entire bioenergyvalue chainrom biomass cultivation through to

consumptionand transer these consequences

to end users (see Figure 4). Under this approach,

all emissions attendant on use o bioenergy

(green, black and blue arrows) become part o the

bioenergy account within the overall accounting

system. Tis approach enables ne tuning o the

combustion actor. Tat is, it allows a combustion

actor other than 0 or 1 to be calculated and applied

to emissions. Tis is accomplished by aggregating

into a single number the atmospheric removals

and emissions over the ull production-through-

use cycle. For example, i throughout the ull

production-through-use cycle 50 tC is sequestered

whilst 100 tC is emitted, a actor o 0.5 could be

applied at the point o combustion.

A value-chain approach can encompass emissions

and removals (i.e. uptake o CO2 rom the

atmosphere) occurring at the biomass cultivation

and harvesting stages, as well as those due totransportation (including to processing acilities

and to end users or uel distributors), those due

Box 1. Grounds for attributing zero CO2 emissions to bioenergy in the energy sector as provided

in the IPCC guidelines

The IPCC guidelines set out the following rationales for attributing zero CO2 emissions to bioenergy in the

energy sector.1. They may not be net emissions if the biomass is sustainably produced. If biomass is harvested at an

unsustainable rate (that is, faster than annual regrowth), net CO2 emissions will appear as a loss of biomassstocks in the Land-Use Change and Forestry module. Other greenhouse gases from biomass fuel combustionare considered net emissions and are reported under Energy (IPCC 1996, Vol. 1, part 1.3).

2. Within the energy module biomass consumption is assumed to equal its regrowth. Any departures from thishypothesis are counted within the Land Use Change and Forestry module (IPCC 1996, Vol. 2, part 1.3).

3. If energy use, or any other factor, is causing a long term decline in the total carbon embodied in standingbiomass (e.g. forests), this net release of carbon should be evident in the calculation of CO2 emissionsdescribed in the Land Use Change and Forestry chapter (IPCC 1996, Vol. 3, part 1.10).

4. Reporting is generally organised according to the sector actually generating emissions or removals. Thereare some exceptions to this practice, such as CO2 emissions from biomass combustion for energy, which arereported in AFOLU Sector as part of net changes in carbon stocks (IPCC 2006, Vol. 1, part 1.6).

5. Biomass data are generally more uncertain than other data in national energy statistics. A large fraction ofthe biomass, used for energy, may be part of the informal economy, and the trade in these type[s] of fuel (fuelwood, agricultural residues, dung cakes, etc.) is frequently not registered in the national energy statistics andbalances (IPCC 2006, Vol. 2, p. 1.19).

6. Net emissions or removals of CO2 are estimated in the AFOLU sector and take account of these emissions(IPCC 2006, Vol. 2, part 1.20).


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to conversion processes, and those due to nal

combustion. Value-chain systems vary in the

extent to which they bring these emissions and

atmospheric removals into the accounts o the end

users o bioenergy. In general, however, benets andliabilities are included regardless o where in the

world they occur.

Value-chain approaches alter a undamental

principle o current instruments used to address

climate changethat nations are responsible only

or emissions occurring within their national

borders. Under value-chain approaches, users tend

to be held responsible or emissions that occur

along a products value chainthe emissions

embodied in the productregardless o wherethese emissions occur (Figure 4).

Unlike the basic 0- or 1-combustion actor

approaches, because they generally attempt to

track all GHG emissions attributable to a specic

lot o biomass, value-chain approaches encounter,

and attempt to deal with, the problem o how to

include emissions rom indirect land use change

(iLUC). Production o a specic lot o biomass can

lead to land use changesand accompanying GHG

emissionsoutside o the production area itsel

(i.e. iLUC), because o market orces. Use o land

to produce biomass or energy rather than another

product generally results in unmet demand, orhigher prices or ood, eed, pulp and paper or

roundwood. o take advantage o the attendant

market opportunities, land conversion may take

place elsewhere or orest harvesting may intensiy.

As many ood, eed and bre markets are global,

iLUC can occur anywhere in the world. For

example, conversion o orest and grasslands

to cropland is occurring in much o Arica and

Latin America both independently o, and in

response to, demand or bioenergy within andoutside these regions. Land conversion can

also occur in developed nations. In the United

States, or example, some analysts suggest that

land is being withdrawn rom the Conservation

Reserve Program in response to higher prices or

corn driven by biouel mandates (Fyksen 2007).

Determining how much land use change is properly

associated with production o biomass or energy

represents a signicant challenge.

Atmosphere

Bioenergy

CO

Consumer

Fossil-CO

Non-CO

Producer

Growth

Oxidation

Bio-CO Fossil-CO

Non-CO

Figure 4. Location o where the physical fows are theoretically accounted or in a value-chain approach


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Te 0-combustion actor approach was designed

or, and works well under, ull reporting o GHG

emissions by all nations. Tis condition, namely,

global reporting o emissions o all greenhouse

gases and changes in terrestrial carbon stocks,

is largely satised under UNFCCC reporting.

However, under the Kyoto Protocol, only a limited

number o nations have obligations to account

or emissions. Te analyses in this report assume

that this situationnon-global accounting o

emissionswill continue in the near uture.

Alternative bioenergy accounting approaches,

proposed to better align bioenergy use with its

GHG consequences, have been largely developed

in response to the act that not all nations must

account or their GHG emissions. Some approaches

modiy the current systemwhich assigns no

emissions at the point o combustion o biomass

whereas others seek to replace it. Te approaches

that we review in this report all under one o three

basic ways to address the limited global scope oaccounting obligations, as ollows.

1. Continue with the current 0-combustion actor

approach but:

a. impose an emission correction actor or

tax; or

b. restrict sources o biomass.

2. Change to assignment o ull value to

combustion emissions (1-combustion

actor approach).

3. Make users responsible or all bioenergy value-

chain emissions.

0-Combustion actor systems are described in

Section 3.1. Tese include the current accounting

system under the UNFCCC and Kyoto Protocol

(Section 3.1.1) and 2 options that modiy the

current system to address the incomplete coverage

o land use sector emissions within accounting

systems (Section 3.1.2). wo 1-combustion actor

approaches are then described (Sections 3.2.1 and

3.2.2), ollowed by descriptions o value-chain

accounting approaches, including 2 that are in use

(Section 3.3.1) and another that has been proposed(Section 3.3.2). A summary and a numerical

example demonstrate how the systems unction in

Section 3.4.

3.1 Combustion actor = 0approaches

3.1.1 The current approach

Te reporting system used under the UNFCCC,and subsequently adopted or accounting under

the Kyoto Protocol, in essence multiplies the CO2

emissions that occur when biomass is combusted

or energy by 0, relying on counting changes

in carbon stock levels in the land use sector to

measure the atmospheric impact o use o biomass.

As pointed out by Searchinger et al. (2009) and

Pingoud et al. (2010), this system does not work

well under the Kyoto Protocol, because it ails to

account or many land use sector emissions. Landuse sector emissions are not counted in:

Alternative accounting systems

3


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1. non-Annex I countries, because they do not

have accounting obligations;

2. Annex I countries that have not ratied the

Kyoto Protocol (e.g. the United States); and

3. Annex I countries that have ratied the KyotoProtocol but where emissions occur:

a. due to management changes in nations

electing not to report emissions rom

management o, or example, orests,

grassland and agricultural lands;4 and

b. due to deorestation in nations experiencing

stable or net gains in orest land area.

Emissions due to deorestation tend not to be

reported in this situation because most orest

inventories only report net changes in orest

area; reorestation and deorestation are notreported separately.

Te analyses in this report assume that, in

particular, many non-Annex I countries will not

commit to ull accounting o carbon stock changes

in the near uture. Although REDD+ can be

expected to move non-Annex I countries towards

such accounting, particularly given the current

status o international climate negotiations, it is not

possible to estimate the number o countries thatwill participate, the extent o accounting that will

be undertaken, or when such accounting will reach

standards prevalent in Annex I nations.

3.1.2 Modifcations to the currentapproach

Emissions correction charge

One way to continue with the existing system

(0-combustion actor) while addressing the

incomplete accounting that results rom the lacko accounting obligations in many countries is

to impose a tax or other correction actor. Te

tax or correction actor would be designed to

compensate or emissions due to carbon stock

reductions in such countries, and possibly also or

GHG emissions caused by biomass conversion in

them, or transportation rom them. A land use

change (LUC) carbon tax or correction actor

could be global or nation-specic. For example, a

country-based correction actor could be applied to

4 Te Kyoto Protocol only requires reporting o emissionsand removals due to aorestation, reorestation anddeorestation.

biomass originating rom a nation to compensate

or the level o deorestation or loss o carbon in

agriculture and grassland soils caused by producing

the biomass that is exported rom that country

or energy.

Including a policy overlay

Another option is to correct aws as they appear

using policies that restrict the entrance o some

types o biomass into the system. For example,

policies could adopted that would restrict biomass

sources to be:

a. acceptable lands, land use change or biomass

types; and

b. acceptable trading partners.

Te policies would then have to dene what

constituted acceptable. Policies could be used to

restrict the source and type o biomass so that

eligible biomass would have no CO2 emissions at

the production stage. For example, a policy could

stipulate that the biomass must be produced on

dedicated plantations or rom waste materials

that met conditions ensuring zero emissions. For

instance, acceptable plantations might have to be

established on degraded or agriculturally non-

productive land and only agricultural residues that

would otherwise be burnt could be used.5

Alternatively, a user (consumer) o biomass or

energy could adopt a policy requiring that the

biomass be produced in a nation that has accepted

economy-wide GHG emission restrictions. A

view emerging in the wake o the United Nations

Climate Change Conerence in Copenhagen is that

bilateral or multilateral climate change agreementsmay be more realistic and easier to negotiate than

a climate change agreement with worldwide, or

even developed-country-wide, commitments. In

this scenario, a 0-combustion actor accounting

approach with an acceptable trading partner

policy overlay would t well. Tis more open,

exible architecture may even provide incentives

5 Not all waste biomass can be considered to have zeroemissions. For example, biomass in landlls can remainthere or decades, so its use or bioenergy causes near-term emissions. Similarly, agricultural residues that wouldremain on the land can increase soil organic carbon stocksrather than releasing carbon as CO2 through oxidation.


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or more parties to undertake post-2012 climate

agreement commitments.

3.2 Combustion actor = 1approaches

Tis section examines the ailpipe and POUR

accounting options, which use a 1-combustion

actor approach. Neither o these approaches has

been used to date.

3.2.1 Tailpipe

We use the term tailpipe to reer to a system

in which only the ows to the atmosphere areconsidered; changes in carbon stocks are not

included in the accounting. Under this approach,

emissions rom bioenergy are treated in the

same way as emissions rom ossil uels; that is,

the biomass consumer uses an emission actor

o 1 or CO2 emissions when the biomass is

combusted. Carbon stock changes are not measured

in determining the impact o use o biomass

or energy.

In our schematic diagram, only the ows to theatmosphere rom bioenergy combustion appear

(Figure 5). I the system were to account or

carbon stock reductions, it would need to include

a mechanism to avoid double counting o the

emissions due to use o biomass or energy.

3.2.2 Point o uptake and release (POUR)

POUR diers rom 0-combustion systems and the

tailpipe method in its approach to accounting or

land use sector removals. Unlike these systems, it

accounts or total net CO2 uptake by plants rom

the atmosphere. While 0-combustion systems

only account or atmospheric removals reected

in carbon stock changes, POUR accounts or

these plus carbon removed rom the landscape

or all purposes. Carbon embodied in biomass

removed rom the landscape represents carbon

removed by plants rom the atmosphere. Tereore,

like positive carbon stock changes, it constitutes

a negative emission. By including the carbon

embedded in wood removed rom the landscape as

part o the negative emissions, double counting is

avoided when this biomass is combusted because

the negative and positive emissions cancel each

other out.

Under POUR, the biomass producer accounts or

total net carbon taken up through plant growth,and the consumer accounts or emissions rom

combustion o the biomass (Figure 6). Figure 6

is identical to Figure 1 because emissions and

Atmosphere

Bioenergy

CO

Consumer

Fossil-CONon-CO

Producer

Fossil-CONon-CO

Figure 5. Location o where the physical fows are theoretically accounted or in a tailpipe approach


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Atmosphere

Bioenergy

CO

Consumer

Fossil-CO

Non-CO

Producer

Growth

Oxidation

Bio-COFossil-CO

Non-CO

C embodied in products

Figure 6. Location o where the physical fows are theoretically accounted or in a point o uptake

and release (POUR) approach (combustion actor = 1)

removals are accounted or when and where

they occur.

Contrary to common belie, in this accountingsystem it is not necessary to measure uxes to

and rom the atmosphere. otal net CO2 removals

rom the atmosphere at the biomass production

point can be estimated by adding the carbon stock

change between years t0 and t1 to the total amount

o biomass embodied in products o all types,

including annual crops and wood removed or

energy and long- and short-lived wood products

over the same period. Since the POUR method

accounts or the total net CO2 removed rom theatmosphere, it is appropriate to account or all

returns o carbon to the atmosphereboth rom

combustion and decay o biomass productswhen

they occur.

3.3 Value-chain approaches

In value-chain systems, CO2 emissions and

removals that occur throughout all production,

conversion, transportation and consumptionprocesses are considered the responsibility o the

consumer (Figure 7).

A value-chain approach is similar, but not identical,

to a lie cycle assessment (LCA). An LCA considers

not only GHG emissions but also, or example,

details o production or conversion processes,

energy balances, inows and outows o materials,

and environmental impacts o waste disposal.Value-chain approaches in the climate context

consider only GHG emissions and removals, and

do not need to consider either conversion process

details or material inows and outows.

Value-chain approaches may estimate or measure

the ollowing: net increases or decreases in carbon

stocks due to land use or management changes;

emissions due to cultivation, including rom use

o ertilisers, liming and tillage; emissions dueto harvesting operations and transportation to a

conversion acility; conversion process emissions,

including rom ossil uels and ermentation;

emissions due to transportation to distributors

or end users o uels; and emissions due

to combustion.

I a value-chain approach is instituted or

bioenergy in nations that address emissions more

generally through a domestic GHG cap, the overall

accounting system is prone to double counting.For example, harvesting, processing and domestic

transportation emissions may be counted in the

transportation sector or by processing entities. I

these emissions are also included in value-chain


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accounts o entities using bioenergy, they would be

counted twice. Tus in such situations value-chain

approaches designed to avoid this problem, such as

described in Section 3.3.2, should be used.

Te value-chain systems described in this report

ocus on biouels rather than bioenergy more

generally. o the extent that biouels are currently

made rom annual crops, only annual growth is

harvested and used. Tereore the systems do not

need to address, or include provisions to address, a

problem that is likely to arise when woody biomass

is used or heat or power: the time required or

trees to remove rom the atmosphere an amount

o CO2 equal to that emitted when woody biomassis combusted.6

3.3.1 The EU Renewable Energy Directiveand US Renewable Fuels Standard

Te EU Renewable Energy Directive and US

Renewable Fuels Standard (RFS2) are attempts

to ensure that biouel use is in line with its GHG

consequences (EU 2009, Federal Register 2010).

6 Te US EPA Renewable Fuels Standard allows useo woody biomass or biouels but limits sources in away likely to limit timing problems. Wood must comerom plantations established as o 2007 or residues, pre-commercial thinnings or wildre areas (see Section 3.3.1).

Both o these systems include emissions due to

production o biomass regardless o where in the

world this occurs (see Section 3.1.1).

Te EU Renewable Energy Directive can be

classied either as an Existing + policy overlay

system or as a Value chain system. We include it

here with other value-chain approaches to avoid

two separate discussions.

Te EU Renewable Energy Directive contains

provisions that prohibit the use o certain types

o biomass in meeting the Directives renewable

energy goals. Although the Directive does not

directly alter Kyoto Protocol or EU-ES rules,it is clearly an attempt to use policy to address

problems arising rom the insucient accounting

o carbon stock changes under the Kyoto Protocol.

Te Directive uses both restrictions on the biomass

source and a value-chain approach to address this

problem. Provisions include:

1. Denitions o lands which are not acceptable

as sources o biomass. Te Directive does not

accept biomass rom land that had high carbon

stocks as o 2008 but no longer qualies as landwith high carbon stocks. Separate denitions

are provided or orests, wetlands and land

with potential tree cover (see Article 17 or the

Atmosphere

Bioenergy

CO

Consumer

Fossil-CO

Non-CO

Producer

Growth

Oxidation

Bio-COFossil-CO

Non-CO

Figure 7. Location o where the physical fows are theoretically accounted or in a value-chain approach


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complete list o criteria determining lands rom

which biomass can not be sourced).

2. A value-chain approach to calculating emissions

along a biouels value chain. Tese calculations

are used to determine whether the level oemissions rom a particular batch o biouel is

under a given threshold. Te Directive requires

that the value-chain GHG emissions o biouels

be 35% lower than those o the ossil uels

they replace. Emissions due to cultivation and

harvesting o biomass, transportation o biomass

or uel to distributors, and conversion processes

are included in the calculation.

Te US EPA RFS2 also restricts which biouels can

be used to meet the US biouel mandate7. It:

1. Provides a positive list o biomass types and

lands rom which biomass can be used. Tis

can be contrasted with the approach in the EU

Renewable Energy Directive which seeks to

dene lands rom which biomass cannot be

used. Five categories o biomass are eligible:

crops and crop residue, planted trees and tree

residues, slash and pre-commercial thinnings,

biomass rom specied areas at risk o wildre,

and algae. Croplands, tree plantations andorests must have been actively managed since

December 2007 or biomass rom them to

be eligible.

2. Applies a value-chain approach. Although more

restrictive with regard to the origin o biomass,

the US EPA RFS2 is less demanding than the EU

Renewable Energy Directive in the calculation

o emissions in some ways. First, the US EPA

RFS2 does not require uel distributors, or

those oering uels to distributors, to calculate

GHG proles. Te US EPA has used models

to calculate which uels and biomass source

combinations (e.g. corn ethanol, sugarcane

ethanol, biodiesel rom soybeans) meet the

requirement that a biouels emissions be 20%

lower than the ossil uel it replaces. Tus,

biouel providers or distributors are relieved

o the burden o calculating emissions along

a value chain and the emission reduction that

7 Te US Energy Independence and Security Act o 2007requires that 36 billion gallons o biouels be blended intoUS transportation uels by 2022 (http://www.epa.gov/otaq/uels/renewableuels/index.htm).

must be met is less stringent than in the EU

regulations. Further, biouels produced in US

conversion acilities built prior to 2007 are

deemed eligible regardless o their actual GHG

proles. On the other hand, the US programmeis more inclusive o value-chain emissions

than the EU programme. Te models used to

calculate eligibility include emissions due to

iLUC (ICC 2010), a source o emissions not yet

included in the EU Renewable Energy Directive.

Tis inclusion may mean that the EU and US

thresholds are closer to each other than the

dierence between 20% and 35% suggests.

3.3.2 Consumer-based: Combustion actor

between 0 and 1

Both the EU and US value chain approaches are

used only to determine whether a biouel can or

can not be used to comply with a mandate. DeCicco

(2009) has proposed a system in which GHG

emissions calculated along the value chain would be

used to compute a combustion actor other than 0

or 1 that would be applied to emissions.

Te DeCicco system starts by allocating credits

(negative emissions) to producers or the net

GHG emissions embodied in the biomass sold

to a consumer. Tese credits are reduced by

emissions due to cultivation (e.g. rom ertilisers

and liming). Remaining credits are then transerred

to the processor. Further deductions may be

made at the processing step (e.g. or emissions

due to use o ossil uels). Remaining credits are

urther transerred to the consumer, in this case

represented by a uel distributor. Te remaining

credits are then used to reduce the uel distributorsobligations under a GHG limitation system. A

deault actor o 1 is used or all uels sold, including

biouels. Tus biouels, unless accompanied by

credits, are subjected to a 1-combustion actor at

point o combustion. A lower actor as justied by

the net credits rom the value-chain GHG emission

calculation can be used or biouels.

Fuel distributors are designated as the consumers

because, in practice, GHG obligations are more

likely to all on distributors than on individualconsumers. Fuel distributors meet their obligations

by submitting allowances to cover the CO2


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Table 1. Summary o accounting systems

Accounting system combustion actor = 0 0< combustion actor < 1 combustion actor = 1Existing + emission correction charge

Existing + policy overlay

Tailpipe

Point of uptake and release (POUR)

Value Chain

Value Chain-DeCicco

emissions o uels sold. o the extent that biouels

are part o a distributors uel mix, the distributors

obligation per gallon o uel sold can be reduced.

Te reduction corresponds to the net amount o CO2

removed rom the atmosphere afer emissions alongthe biouel value chain have been deducted rom

credits. Any emissions along the value chain that

are covered by another party (e.g. emissions rom

electricity plants that also have emission obligations)

are excluded rom DeCiccos system to avoid double

counting.

3.4 Summary and numericalexamples

Te preceding discussions have considered

alternative approaches to determining a actor tobe applied to emissions at the point o combustion.

A summary o the actors used by dierent

approaches rom bioenergy in accounting systems,

based on the combustion actor used, is given in

able 1.

Table 2. Numerical example demonstrating diferences between the accounting systems

Producer component Actual Kyoto Protocol Tailpipe POUR Value-chain DeCiccoNet photosynthesis -148 139 -148 139a in cons. in cons.

Stock change na 12 345 na na na na

Harvesting and processsing

Collection and processing 22 540 22 540 22 540 22 540 in cons. 22 540

Process waste (burnt) 8 024 8 024 8 024 in cons. 8 024

Subtotal 30 564 22 540 30 564 30 564 in cons. 30 564

Transportation emissions

Transportation 2 473 2 473 2 473 2 473 in cons. 2 473

Producer total -115 103 37 357 33 037 -115 103 0 33 037

Consumer component

Wood consumption 152 460 0 152 460 152 460 72 488

Consumer total 152 460 0 152 460 152 460 72 488 39 452

Other components

International transportation 35 131 na na na in cons. in cons.

Global total 72 488 37 357 185 497 37 357 72 488b 72 488

Global total i producer does

not participate 0 152 460 152 460 72 488 72 488

a Value in italics is an estimate and is not measured.

b 105,525 if the producer also accounts for emissionsna = not applicable

in cons. = in consumer total


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3.4.1 Numerical example

In able 2, we use a hypothetical numerical example

to illustrate (1) the range o emissions and removals

(uptake o CO2 by plants and soils) potentiallyincluded in the accounting systems and (2) where

in the producer or consumer accountthese

emissions and removals are accounted or in the

dierent systems.

Description

In the example, a producer (nation, region or

individual) produces 83 200 t o wood pellets that

are shipped to the consumer, who uses them to

produce 1.0 PJ o electricity. Tere are emissionsalong the entire value chain because the wood must

be harvested, dried, pelletised and transported to

the consumer beore combustion. In the example,

it is assumed that the pellets are shipped rom

the producer to the consumer by sea and that

the consumers acility is on the coast. Values or

harvesting, processing and transportation emissions

are based on values or pellets produced in Canada

and shipped to Sweden (Magelli et al. 2009). As the

consumers acility is on the coast, no transportation

emissions are allotted to the consumer.

Te biomass is assumed to come rom a orest

that has been sustainably managed or multiple

decades (the average harvest level is less than the

net annual increment). o meet increased demand

or bioenergy, the rotation length is shortened

(requency o harvest increases), which results in

a period o time when the harvest exceeds the net

annual increment. Afer this time, the management

returns to a sustainable management regime

although with a shorter harvest rotation. In the

example, the amount harvested (87 539 Mgthe

amount o biomass required to make the wood

pellets) exceeds orest growth (i.e. 80 803 Mg).

In addition, 5% o the harvested biomass (e.g.

harvesting residue lef in the orest) is not shipped

to the consumer. For simplicity in accounting

or GHG emissions, we assume that this residue

is burnt, or example by the local population or

heating and cooking.

Te distribution o these emissions between

the producer and consumer under the various

accounting systems is shown in the 5 right-hand

columns in able 2. Where the magnitude o net

uptake o CO2 by the orest (net photosynthesis)

is needed or an accounting system, it is assumed

that this is not measured directly but is estimatedas the stock change plus the amount o biomass

shipped.

Troughout able 2, it is assumed that the

consumer o the biomass operates in a nation with

GHG accounting obligations. Te row Producer

total indicates the total GHG emissions that are

accounted or in the Producer nation i that nation

has an accounting obligation. Consumer total

indicates the total GHG emissions that will be

covered by the system i only the consumer is ina nation with GHG obligations. Te row Global

otal indicates the GHG emissions that will be

accounted or i both consumer and producer

are in nations with GHG obligations. Te nal

row indicates emissions accounted or i the

biomass producer is not in a nation with GHG

accounting obligations.

Combustion actor = 0 approaches

In general, under the Kyoto Protocol, netphotosynthesis, decay o biomass and emissions

rom biouel combustion are ignored. Te stock

change is recorded as an emission i there is a

carbon stock loss or as an atmospheric removal

(reduction in emissions) i there is a stock gain.

As a result, in this example, the producer accounts

or the stock loss, harvesting emissions and

emissions due to transportation o biomass to the

coast. However, i the producer is in a developing

country (i.e. a nation without accounting

obligations under the Kyoto Protocol) none o

these emissions will be accounted or as shown

in the nal row in able 2. Te consumer has no

emissions, regardless o whether the consumer

is in a developing country or country with Kyoto

Protocol accounting obligations, because neither

international shipping emissions nor emissions

at the point o combustion are accounted or

under the Kyoto Protocol. Tus, in this example,

under the Kyoto Protocol only 37 357 out o

72 488 Mg CO2-eq are accounted or even i thebiomass producer is located in a nation with

GHG obligations.


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Combustion actor = 1 approaches

In the tailpipe approach, by denition, only

emissions rom combustion activities (including

the burning o residue) are included. As shown

in able 2, the producers 33 037 Mg CO2-eq oemissions will be accounted or i the producer is

in a nation with GHG obligations. Te consumer

will report the actual amount due to combustion o

the biomass (152 460 Mg CO2-eq) but is not given

any credit or plant growth that removes CO2 rom

the atmosphere. Consequently, the Global otal

calculated using a tailpipe approach is more than

two and a hal times actual total global emissions.

In the POUR method, the producer records anestimate o the net photosynthesis. I the producer

is in a nation with GHG obligations, emissions

due to harvesting and processing and domestic

transportation will be accounted or. When added

to the estimated net photosynthesis, the producers

total emissions become 115 103 Mg CO2-eq.

Te consumer records the emissions rom the

combustion o the biomass.

I the producer is not in a nation with GHG

accounting obligations and only the consumersemissions are reported, then POUR accounting

reaches the same numbers as the tailpipe approach.

However, a primary motivation or POUR is to

ensure that carbon stock losses turn up in the

accounts o entities combusting biomass or

energy whilst avoiding an accounting system that

discourages bioenergy where this is not the case.

o accomplish this, POUR would need to include

a mechanism that transers credits rom net

photosynthesis to consumers. I such a mechanism

is included, POUR would record the same amount

as i both Consumer and Producer nation had

obligations, i.e., 37 357 Mg CO2-eq. Emissions

rom international transportation would not be

included in the POUR part o the accounting

system as POUR only addresses emissions due to

use o biomass.

Te possibility o credits equal to net removals, i.e.,

the -115 103 Mg CO2-eq that would be recorded

in the Producer nation in this example may entice

producers to participate in a POUR approach.

Value-chain approaches

As explained above, a value-chain approach

transers responsibility or all emissions along

the value chain to the consumer. By including

emissions that occur in nations without GHG

obligations as well as those due to international

transport, value-chain approaches can report actual

global emissions (72 488 Mg CO2-eq) regardless o

whether a producing nation has a GHG obligation.

However, as mentioned, this approach is prone to

double counting. For example, even i harvesting,

processing and domestic transportation emissions

are counted in the producer nation they could also

included in value-chain accounts o entities using

bioenergy. I this were to happen, they would be

counted twice. Under such circumstances, the total

emissions under Value chain would increase to

105 525 Mg CO2-eq (72 488 + 30 564 + 2473).

DeCiccos approach addresses this problem by

specically omitting rom the bioenergy value chainany emissions that would be reported elsewhere

in a GHG accounting system. In our example,

i the producer nation reports emissions due to

harvesting, processing and domestic transportation

(i.e. 30 564 + 2473 = 33 037 Mg CO2-eq) these

emissions would not enter into consumer totals.

All the remaining emissions, including the net

removals, would be the responsibility o the

consumer (-148 139 + 152 460 + 35 131). As the

harvesting, process and domestic transportation

emissions are reported either within the value

chain (producer does not report any GHGs) or

outside o it (producer does report some GHG

emissions) the accounting system will report 72 488

Mg CO2-eq. regardless o the participation o the

producer nation.


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One o the most problematic aspects in selecting

or reaching agreement on an internationally

applicable accounting system or bioenergy and

related land-use sector emissions stems rom the

act that the condition o orests and croplands

varies greatly rom nation to nation. In most

developed countries, a signicant proportion o

orest land was converted to croplands during past

centuries. Tese nations thereore have ample land

on which to produce biomass or biouels without

causing extensive emissions rom deorestationin current time periods. In many developing

countries, however, signicant conversion o orests

to croplands is still, or only now, underway. Tis

conversion serves both to increase the amount o

land available or meeting ood demand and to

provide land or biomass or bioenergy. Te result is

that i emissions due to deorestation in developing

countries are attributed to biouelsas occurs

under the EU Renewable Energy Directive and the

US RFS2these countries may be treated unairly

compared with developed countries.

Furthermore, orest area in many developed nations

is stable or growing because o actors unrelated to

production o biomass or energy. Causes include

abandonment o armland, aorestation drives and

changing market conditions which may preserve

domestic carbon stocks at the expense o carbon

stocks elsewhere. As a result, under a non-modied,

Kyoto Protocol 0-combustion actor approach,

developed nations may be in a position to increase

harvests, including clear-cutting that does not

result in land use change, to obtain woody biomass

or energy without any emissions showing up in

Evaluation o accountingsystems4

either their energy or land use sector accounts. Tis

contrasts with the situation in nations with largely

intact orests that are at earlier stages o conversion

o orest to agricultural lands. I aced with a GHG

obligation in the land use sector, these nations

would incur emissions due to carbon stock losses,

possibly or many decades, or any increases in

harvests.

Current REDD+ discussions include proposals to

use orward-looking baselines to accommodatesuch dierences. However, establishing

substantiating credible orward-looking baselines

aces signicant hurdles because uture orest

cover and condition cannot be predicted with any

condence. Consequently any emission reductions

measured in relation to such baselines can not have

the certitude o emission accounts. Since the design

o an accounting system that could satisactorily

accommodate national dierences is an issue

requiring considerable research, the ollowing

evaluation does not try to assess the cross-nationalequity o the accounting systems.

General criteria

A seminal paper on the accounting o GHG

emissions rom bioenergy was written by a group

o experts meeting in Edmonton, Canada, in 1997

(Apps et al. 1997). In A statement rom Edmonton,

the authors identied the ollowing 5 principles or

an accounting system: accuracy, simplicity, scale

independence, precedence and incentives. In thecontext o accounting systems, as distinguished

rom measurement contexts, accuracy reers to


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accounting all emissions without double counting;

it can thereore be considered within the more

general concept o comprehensiveness over space

and time. In the Edmonton article, precedence is

used to reer to practices that are already in useand thus can be considered an aspect o simplicity.

Noting that a system should be as simple as

possible, but not simpler (in the words o Albert

Einstein), we thereore propose that a GHG

accounting system should be evaluated against the

ollowing criteria:

comprehensiveness over space and time;

simplicity; and

scale independence.

As pointed out in Section 3, we believe that

many countries are unlikely to adopt either

economy-wide or land-use sector-wide GHG

emission limitation obligations in the near uture.

Consequently, all the ollowing evaluations assume

this as a reality.

4.1 Comprehensiveness overspace and time

Since it is assumed that none o the accounting

options covers emissions rom use o bioenergy

in developing countries because these countries

will not take on GHG-limitation obligations,

the maximum spatial coverage assumed to be

achievable is complete coverage o emissions rom

use o bioenergy in developed countries that have

economy-wide GHG limitations, including as may

occur in the United States under the Clean Air

Act, orms o economy-wide GHG regulations

other than caps on tons o emissions (FederalRegister 2009).

4.1.1 Current approach

Given the maximum spatial coverage as dened

above, the 0-combustion actor approach

has substantial weaknesses in terms o

comprehensiveness over space. Under the current

approach, emissions at the point o combustion o

biomass are not counted anywhere in the world,

and emissions due to carbon stock reductions are

counted only in nations that have accepted GHG

limitations under the Kyoto Protocol. Even in these

countries, current Kyoto Protocol rules only require

accounting o emissions due to deorestation, with

accounting o orest and other land management

voluntary. Furthermore, since deorestationappears only i there is net loss o orest area or

i inventories report areas o deorestation and

aorestation independently rather than on a net

basis (UNFCCC 1998), the result is a signicant

lack o spatial coverage and thus signicant

inaccuracy with respect to both space and time.

4.1.2 Modifcations to the currentapproach

Modied 0-combustion actor approachesattempt to compensate or the incomplete spatial

coverage o the current approach by applying a

correction actor or policies that place restrictions

on the origin o biomass. In the correction actor

approach, an emissions correction charge is added

(e.g. via a LUC tax or iLUC actor) based on global

estimates o emissions related to carbon stock

reductions in non-capped countries. Factors or

taxes could also be used to address emissions due

to conversion and transportation in these nations.

However, to date, most actors proposed have

ocused only on incorporating emissions due to

carbon stock losses8.

In eect, taxes or actors compensate or the

incompleteness o spatial coverage o emissions

due to carbon stock losses globally by increasing

the stated amount o emissions rom bioenergy

in, or the costs o biomass rom, the countries

where the tax or actor applies. In this way, taxes

or actors counteract both the tendency to usebioenergy beyond the GHG emission reductions it

achieves and the incentive to use bioenergy as an

inexpensive way to meet GHG obligations. Tese

approaches would result in accurate accounting

o timing only to the extent that use o biomass

rom orest land converted to other land uses and

increased harvests rom orests, as well as iLUC,

is discouraged.

8 In cases where emission actors are calculated orspecic biouel chains, they constitute part o a valuechain approach.


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Under an acceptable trading partner approach,

spatial coverage gaps would be partially or

completely closed or participating nations i

all acceptable partners took on economy-wide

GHG limitation obligations. However, unless alarge number o nations accept such obligations,

this approach will simply leave most biomass use

outside o the system, and thereore unaccounted

or. Even in the case o nations with GHG

obligations, the degree o closure o spatial gaps

and accuracy o timing would depend on the rules

governing which carbon stock reductions are

included in land use sector accounting.

In approaches based on dening acceptable

lands or biomass sources, eectiveness o spatialcompleteness is highly dependent on how the

lands or acceptable sources are dened. It is likely

that the ruling out approach o the EU Renewable

Energy Directive would be less eective in

achieving spatial completeness than a positive list

such as that o the US RFS2. Nevertheless, even

policies o this type may not be able to cover all

possibilities because o the number o possibilities

that may be involved (Pena et al. 2010).

Te time accuracy o acceptable lands or biomass

sources approaches can only be judged in cases

where they have been relatively ully developed.

o date, these policy approaches have only been

applied to biouels. Te timing issue is generally

substantially less complex or biouels than in the

case o use o woody biomass, as annual crops

are currently the primary source o biomass

or biouels. Tereore, the time accuracy o an

acceptable lands or biomass sources approach

i applied more generally to bioenergy cannot beevaluated at this time.

4.1.3 Combustion actor = 1 approaches

1-Combustion actor approaches, that is, ully

counting emissions rom biomass combustion,

signicantly increase spatial coverage o bioenergy

emissions. All carbon stock reductions represented

by the biomass combusted in nations with

GHG limitations would be counted regardless

o where the biomass originated. In this way, a

1-combustion actor approach comes quite close

to achieving maximum coverage o carbon

stock losses due to use o bioenergy in nations

with GHG limitations. O the emissions due to

carbon-stock level changes that are attendant

on this use, the approach only ails to account

or emissions rom oxidation o biomass le inorests, soil-carbon losses that may accompany

harvests, and decay o biomass that was harvested

but not converted or use or bioenergy. Te

magnitude o these emissions is signicantly lower

than the carbon losses unaccounted or by the

0-combustion actor system.

Te tailpipe method is not accurate with respect

to timing, in that it ignores the atmospheric

removals o CO2 that result when orest recovers

rom the biomass harvest. As this omissionconcerns removals, that is, negative emissions,

the tailpipe method can be considered quite

conservative. It generally results in overestimating

the environmental damage and underestimating

the benets rom bioenergy i regrowth o the

harvested biomass occurs.

However, i major emissions occur in addition to

those caused by combusting harvested biomass

as happens, or example, in the case o drainage opeatlandeven ull accounting o emissions rom

biomass combustion will result in underestimation

o the overall GHG emissions.

Te POUR method attempts to improve accuracy

across space and time by including all uptake

and release o CO2, both that which appears as

stock changes and that which is embodied in

removed wood products. All uptake as well as

any land-sector emissions, are recorded in the

producer countrys account and all releases due tocombustion in the consumer countrys account.

POUR provides the most complete coverage

and accurate timing i producer countries either

have a GHG obligation or are entitled to receive

credits or sequestered carbon. Where producer

countries neither have GHG obligations nor are

eligible or credits, POUR reverts to the tailpipe

method. We see this as an advantage o POUR

it is conservative under a system that does not

provide credits or uptake to nations without

GHG obligations but does provide a spatially and

temporally accurate account when both producer

and consumer participate.


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4.1.4 Value-chain approaches

All value-chain approaches include emissions that

neither the 0- nor 1-combustion actor approaches

cover. Tis is because they include some or allemissions due to cultivation, conversion and

transportation o biomass to end users, regardless

o where in the world they occur. However, value-

chain approaches tend to be spatially incomplete

primarily because they attempt to link emissions

along the production chain to specic lots or

batches o biomass rather than being designed to

account or emissions across the landscape, e.g., at a

national scale.

Since a given lot o biomass comes rom a specied,restricted land area, only emissions incurred

during management o, and use changes on, this

land can be directly associated with the batch. As

iLUC can occur anywhere in the world, there is

no way to determine how much o this is due to a

specic lot o biomass. Failure to include emissions

due to iLUC is a primary source o incomplete

spatial coverage.

Both the EU Renewable Energy Directive andthe DeCicco system attempt to avoid the iLUC

problem through nancial mechanisms designed

to discourage iLUC. However, the eectiveness o

the EU approach has been evaluated as very poor

(Lange 2011), and it is unilikely that the DeCicco

approach would are better. As the US RFS2

includes iLUC in its modelling o emissionseven

though this modelling is open to many questions

it could be assumed that its spatial coverage o iLUC

is more complete than that o the other systems.

Te spatial coverage o the EU Renewable Energy

Directive is also less complete than that o the

US RFS2 with regard to emissions rom land use

change directly involved in production o biomass.

Te exclusion approachas distinct rom the US

RFS2 positive listails to pick up some potentially

signicant sources o carbon stock reductions.

Carbon stock losses on land that does not undergo

a land category change are not counted. A great

deal o biomass, or example, can be removed rom

some orests without changing their category. In

some countries, land with 10% or 30% crown cover

qualies as a orest. In these countries, substantial

biomass could be removed rom orests with crown

cover o 80% without the orest alling beneath

the 30% crown cover stipulated as constituting a

category change.

In addition to spatial problems, value-chain

approaches ace timing issues i they are applied

to woody biomass rather than to annual crops.

Removal o any amount o woody biomass rom a

orest or delivery to a user entails a carbon stock

reduction on the parcel o land harvested. Under

the limited spatial perspective o a lot or batch-

based approach, the recovery o carbon stocks is

limited to this location. Hence, in the case o woody

biomass, relatively long time periodsranging

rom several years in the case o ast-growing,short-rotation plantations to decades or long-

rotation orests managed primarily or lumberare

required or the regrowth, and it is likely to prove

challenging to include this regrowth in a value-

chain calculation.

Te alternative is to try to link regrowth across an

entire orest to a biouel batch. However, unless

there is a contract or legal connection between an

entire orest and a particular bioenergy producer,it is hard to see how orest regrowth across a

particular orest holdingmuch less across an

entire nationcould be attributed to any lot o

bioenergy. Any attempt to establish such a link aces

additional objections because orest regrowth in

managed orests is generally undertaken or high-

value wood products, not or biomass or energy.

Consequently, value-chain approaches involving

use o woody biomass require a mechanism to

accurately reect the time dierence betweenemissions and removals, that is, the reality that

bioenergy emissions occur immediately whilst

compensating recovery o carbon stocks can

take years, decades or longer. Designing such a

mechanism that would be acceptable among all

stakeholders is likely to be challenging.

Te EU Renewable Energy Directive and DeCiccos

system avoid the timing issue because they ocus on

annual crops as the source o biomass or biouels.

However, these approaches would have to address

the timing issue i they were extended to heat and

power or i biouels rom woody biomass became


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a commercial option. Te US RFS2 value-chain

system does allow use o woody biomass to produce

eligible biouels. Te restrictions on the types o

woody biomass that can be used under the USRFS2

restrictions on eligible woody biomass may serveto keep the lag between emissions and regrowth

within acceptable bounds rom the point o view

o climate mitigation and stakeholders. However,

until signicant amounts o woody biomass are

used or biouels, it is not possible to establish the

rotation lengths and constancy o plantation carbon

stocks. Tereore, it is not yet possible to assess the

length o time imbalances that may occur between

GHG emissions and recovery o stocks under the

US RFS2. Some other options or dealing with this

problem in value-chain approaches are suggestedin Box 2.

4.2 Simplicity

4.2.1 Current approach

Te unmodied 0-combustion actor approach

may be the simplest o the approaches that include

emissions rom land use change; certainly, its

simplicity was one o the reasons that it was selectedunder the UNFCCC and Kyoto Protocol. It requires

only the measurement o carbon stock changes, or

which there is considerable experience due to orest

inventories. However, the question arises whether,

under real-world conditions, this approach is

simpler than possible given that the accounting

system should achieve reasonable coverage.

4.2.2 Modifcations to the current

approach

Correction actors and policy overlays, and

restricted trading partners

In principle, use o a correction actor is relatively

simple; however, in practice, it may be quite

complicated to estimate and agree on such actors.

Whilst policy overlays that dene acceptable

partners or sources o biomass add complexity,

the degree o complexity depends on the policy.

o date, biouel consumers have designed policy

overlays that rely on denitions, particularly

denitions o acceptable sources o biomass.

Care is needed in ormulating such denitions to

ensure that they cannot be interpreted dierently

in dierent countries or by dierent participants

in the system. In this regard, the US RFS2, whose

denitions were rened through an extensive

stakeholder process, seems to have been more

successul in achieving simplicity than the EU

Renewable Energy Directive. However, consumer

nations dierent objectives and situations maymake it signicantly more difcult to design

denitions or other policy overlays that would be

accepted among several trading partners, much

less worldwide.

Box 2. Timing in value-chain systems: Possible options

One option or dealing with timing in value-chain systems is based on the act that it is not possible to combust

biomass that has not already removed CO2 rom the atmosphere. This option adopts the perspective that usingbiomass or energy does not add to the atmospheric burden because the CO2 being returned to the atmospherehad previously been removed rom it within the time rame o human-induced climate change. Under thisapproach, there would be no need to measure carbon stock levels between 2 points o time, as is done under the0-combustion actor and POUR approaches.

A less radical option might come rom new research that is exploring the possibility o introducing inormationon expected biomass recovery time into an emission actor (Walker et al. 2010, Zanchi et al. 2010a, 2010b). Thisrequires the use o orward baselines that indicate carbon stock levels over time with and without removal othe biomass. By comparing these 2 levels, it is possible to determine the percentage o emissions that would becompensated or by orest growth at any particular point o time. This approach poses several challenges. First, asis generally the case, reaching agreement on uture baselines across a range o stakeholders is dicult. Second,incorporating the results into an emission actor would require agreement on the appropriate point o time at

which to make the assessment. Possibly more problematic is the act that whilst comparison o carbon stock levelswith and without harvests is clearly a useul tool or selection o energy options, accounting systems are intendedto provide inormation about results o actions, not comparative results.


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Finally, actor approaches and policy overlays,

including restrictions on trading partners, must

be designed in such a way that they cannot be

perceived as constituting an unair trade practice.

Tis in itsel may prove a complex undertaking,particularly in the case o restricting trading

partners. All o these approaches are likely to be

subject to scrutiny by the World rade Organization

(WO), an exceedingly complex process in itsel.

4.2.3 Combustion actor = 1 approaches

1-Combustion actor approaches may constitute

the simplest possible approaches under real-world

circumstances.

Tailpipe method

A tailpipe accounting system may be the simplest

o all approaches. It requires only that bioenergy

emissions be measured or the amount o biomass

consumed or bioenergy be measured and then

converted to CO2. Tere is no need to measure

carbon stock levels, use o ertilisers during

cultivation or ossil uels used in cultivation,

conversion and transportation o biomass.

Point o uptake and release (POUR)

Te POUR approach is less simple than the tailpipe

and 0-combustion actor approaches, because

it requires measuring carbon stock changes,

inormation on the total amount o biomass sold

by producers, as well as measurments o bioenergy

emissions in the consumer nation. Although

this may be relatively straightorward or some

biomass uses and commodities, it will become

more complicated where biomass can be used ormultiple purposes. In particular, it would most

likely be necessary to separate biomass used or

ood rom other biomass. Consequently, it would be

necessary to separate:

a. oils used or ood and eed rom those used or

energy; and

b. grains used or ood and eed rom those used

or energy.

Assuming reporting o GHGs or oodstus were

not part o the accounting system, statistics on

the oils and grains used or energy in nations with

GHG obligations would be needed, along with an

algorithm to relate the carbon in these oils and

grains to net CO2 removed during the growth o

the related plants. Developing these may be quite

complicated because o the need to determine how

to handle both in-eld and eld-to-end-user losses.

4.2.4 Value-chain approaches

Value-chain approaches are inherently more

complicated than 0- an

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